Wp/6766/2019 Of Arjun Krishna Kondamani v. Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated: 10.04.2019 Coram The Honourable DR.JUSTICE ANITA SUMANTH W.P. No.6766 of 2019& W.M.P.Nos.7566, 7565 of 2019 Arjun Krishna Kondamani ....Petitioner /Vs/ 1.Deputy Commissioner of Income Tax Non-Corporate Circle-15(1) 121 Uttamar Gandhi Salai Nungambakkam, Chennai-600034. 2.The Commissioner of Income Tax (Appeals)15 Ayyakar Bhavan 121, Uttamar Gandhi Road Nungambakkam, Chennai-600034. 3.The Chief Commissioner of Income Tax(Appeals) Aayakar Bhavan 121, Uttamar Gandhi Salai Nungambakkam, Chennai-600034. 4.Principal Commissioner of Income Tax (Appeals) Aayakar Bhavan 121, Uttamar Gandhi Salai Nungambakkam, Chennai-600 034.....Respondents P R A Y E R: WRIT PETITION under Article 226 of the Constitutionin the nature of Certiorari calling for the records of of the 2[nd]respondent in ITA No.168/CIT(Appeal)-15/2016-17 for theAssessment year 2013-14 and quash the impugned order, dated28.12.2018 dismissing the appeal of the petitioner for theassessment year 2013-14 in limine without proper appreciation ofthe facts and the law applicable. https://hcservices.ecourts.gov.in/hcservices/ O R D E R The petitioner challenges an order passed by theCommissioner of Income Tax(Appeals) (in short 'CIT(A)') dated28.12.2018 for assessment year 2013-14. 2. Heard Mr.Balachander, learned counsel for the petitionerand Mr.A.P.Srinivas, learned Senior Standing Counsel for therespondents. 3. The petitioner is an assessee on the file of the 1[st]respondent and suffered an order of assessment in respect ofassessment year 2013-14, vide order dated 22.03.2016. He filedan appeal against the same before the CIT(A)/the 2[nd] respondentherein, filed manually on 28.04.2016. 4. Rule 45 of the Income Tax Rules, 1962 ('Rules') providefor the form of appeal to the CIT(A). With effect from01.03.2016, the Rules stood amended to state, among other thingsthat, any appeal to be filed before the CIT(A) in Form No.35,shall, in the case of a person who is required to furnish returnof income electronically under Rule 12(3), be furnishedelectronically under digital signature. The Rule is extractedbelow: Form of appeal to Commissioner (Appeals). 45.(1) A appeal to the Commissioner(Appeals) shall be made in Form No.35.(2)Form No.35 shall be furnished in thefollowing manner, namely:- (a) in the case of a person who isrequired to furnish return of incomeelectronically under sub-rule (3) of rule 12,-(i) by furnishing the form electronicallyunder digital signature, if the return ofincome is furnished under digital signature; (ii) by furnishing the form electronicallythrough electronic verification code in a casenot covered under sub-clause (i);(b) in a case where the assessee has theoption to furnish the return of income in paperfrom, by furnishing the form electronically inaccordance with clause (a) of sub-rule (2) orin paper form... 5. The petitioner, admittedly, has filed his returnelectronically. The appeal was however filed manually, in timeand within the limitation provided under the Act. The appeal was taken up for hearing by the CIT(A) on 10.10.2018, when thepetitioner appeared before the Officer and made submissions. 6. The appeal records were called for and the docket sheetof the appeal proceedings reveals that the case was heard on10.10.2018 and was reposted to 11.12.2018. On 11.12.2018, theorder sheet reads that a written submission was filed, the casewas heard, and the matter adjourned. 7. It appears that the CIT(A), has thereafter noted theposition that the appeal had been filed on 02.05.2016 manuallyand thus, was defective in the light of Rule 45 of the Rules. Anotice was thus issued on 11.12.2018 pointing out the aforesaiddefect and calling for rectification thereof in the followingterms. taken up for hearing by the CIT(A) on 10.10.2018, when thepetitioner appeared before the Officer and made submissions. 6. The appeal records were called for and the docket sheetof the appeal proceedings reveals that the case was heard on10.10.2018 and was reposted to 11.12.2018. On 11.12.2018, theorder sheet reads that a written submission was filed, the casewas heard, and the matter adjourned. 7. It appears that the CIT(A), has thereafter noted theposition that the appeal had been filed on 02.05.2016 manuallyand thus, was defective in the light of Rule 45 of the Rules. Anotice was thus issued on 11.12.2018 pointing out the aforesaiddefect and calling for rectification thereof in the followingterms. Rule 45 of the Tax Rules, 1962 mandatescompulsory e-filing of appeals before theCommissioner of Income Tax(Appeals) with effectfrom 01.03.2016 in respect of persons who arerequired to furnish return of incomeelectronically. The due date was extended upto15/06/2016. It appears from this office recordthat you have filed appeal for the AY 2013-14in paper Form-35 instead of e-filing. 2. In view of the above, your appeal isproposed to be treated as non-est. 3. In case you have filed your appealelectronically, the same may be kindly bebrought to the notice of this officeimmediately along with a copy of such e-filedappeal, within 10 days of receipt of thisnotice, failing which your appeal will betreated as invalid and disposed of accordingly. 8. A reply was filed by the asseessee on 18.12.2018 asfollows: With reference to notice dated 11.12.2018 inITA No.168/CIT(A)/e-filling/16-17 in case ofArjun Krishna Kondamani in Appeal No.168/2015-16. I am instructed to submit as follows: 1.The appeal has been filed on 02/05/2016 inpaper from (manual) and duly acknowledged byyour office. 2.In your notice under Sec.250 of Income TaxAct 1961, you have stated that the appeal isproposed to be treated as non-est for which Iam instructed to submit as under: a.The appeal has been filled on 02/05/2016 andas per circular 20 of 2016 dated 26.05.2016 inF.No.279/Misc/m-54/2016/ITJ the Compulsory e-filling of appeals for Individuals were madeoperational only from 12/05/2016 and hence theappeal filed on 02/05/2016 in paper from isvalid in terms of Rule 45 of IT Rules 1962 readwith Circular No:20 dated 26/05/2016. In view of the above circular you are requestedto treat the appeal as valid and dispose thesame in accordance with law. 9. It is in the light of the aforesaid submission of theassesser that the impugned order has been passed on 28.12.2018,dismissing the appeal of the petitioner, in limine and asinvalid. 10. The amendment to Rule 45 is effective, 01.03.2016.However, the Central Bureau of Direct Taxes, in recognition ofthe position that assessees were not fully aware of the newprocedure, had issued Circular No.20/2016 dated 26.05.2016. TheCircular recognizes the lacunae in the e-filing procedures. Italso admits that Electronic Verification Functionality for theverification of e-appeals was made operational only with effectfrom 12.05.2016 for individuals and from 19.05.2019 for otherpersons. 11. There were other issues as well including theprescription for word limit for grounds of appeal as well as themapping of jurisdiction of the Appellate Commissioner. Inrecognition of the aforesaid difficulties, the time limit forapplication of the Circular was extended up to 15[th] June, 2016.E-appeals filed within the aforesaid extended period were to betreated as valid. The Circular is extracted below: 11. There were other issues as well including theprescription for word limit for grounds of appeal as well as themapping of jurisdiction of the Appellate Commissioner. Inrecognition of the aforesaid difficulties, the time limit forapplication of the Circular was extended up to 15[th] June, 2016.E-appeals filed within the aforesaid extended period were to betreated as valid. The Circular is extracted below: Subject: E-filling of appeals: Extensionof time limit-regarding Rule 45 of theIncome-Tax Rules, 1962, mandates compulsory e-filling of appeals beforeCommissioners of Income- Tax(Appeals) with effect from March, 2016 inrespect of persons who are required to furnishreturn of Direct Taxes(hereinafter referred toas the Board) that in some cases the papers whowere required to e-file Form35 were unable todo so due to lack of knowledge about e-fillingprocedure and/or technical issues in e-filing.Also, the EVC functionality for verification of e-appeals were mad operational from 12[th] May2016 for individuals and from 19[th] May, 2016 forother persons. Word limit for filing grounds ofappeal and mapping of jurisdiction ofCommissioner of Income-tax(Appeals) were also acause of grievance in some cases. 2. The matter has been examined by theBoard. While the underlying issues relating toe-filing of appeals have since been addressedand resolved in order to mitigate anyinconvenience cause to the taxpayer on accountof the new requirement of mandatory e-filingappeals, it has been decided to extend the timefor filing of such e-appeals. E-Appeals whichwere due to be filed by 15[th] May, 2016 can befiled up to 15[th] June, 2016. All e-appeals filedwithin this extended period would be treated asappeals filed in time. 12. I am to decide in the light of the aforesaid Circular,as to whether, the appeal filed manually by the petitioner on28.04.2016 is to be treated as a valid appeal to be heard anddisposed on merits. 13. Clearly, the amendment to Rule 45 is a continuation ofthe process of technological upgradation of the Income TaxDepartment. This process has commenced more than a severaldecade ago with various electronic features being introducedperiodically into the Act and the Rules, such as, filing ofreturns, maintenance of records and now filing of appeals aswell. While it is a laudable object, one cannot lose sight ofthe position that there are several difficulties that have beenencountered both on the part of the Department as well as theAssessees in effecting such transition. 14. In the present case, the manual appeal has, admittedly,been filed on time. The CIT(A) has also heard the matter onmerits on two(2) occasions and written submissions of thepetitioner are available on record. In such circumstances, I amof the view that the statutory right of appeal granted to thepetitioner, a substantive right, should not be whittling downby virtue of a procedural infirmity, admittedly, committed byit. Without it setting a precedent, I thus, direct thepetitioner to comply with the provisions of Rule 45 within aperiod of three(3) weeks from today. Upon being satisfied withcompliance thereof, the CIT(A) will take the appeal up foradjudication on merits without reference to limitation. Sincethe manual appeal has admittedly, been filed within time andupon payment of necessary fee, there is no necessity for thepetitioner to remit the appeal fee yet again in respect of the appeal filed electronically. Necessary instructions be issued inthis regard by learned Standing Counsel to the Authorities. Thiswrit petition is allowed in the aforesaid terms. appeal filed electronically. Necessary instructions be issued inthis regard by learned Standing Counsel to the Authorities. Thiswrit petition is allowed in the aforesaid terms. 15. In the light of my conclusion as aforesaid, the impugnedorder is set aside. The appellate authority will passappropriate orders on the e-appeal to be filed by the petitionerwithin a period of three(3) weeks after filing of the same inaccordance with law and after hearing the petitioner.Consequently, connected miscellaneous petitions are closed. Nocosts. Sd/- Assistant Registrar(CCC) //True Copy// Sub Assistant RegistrarTo1.Deputy Commissioner of Income Tax Non-Corporate Circle-15(1) 121 Uttamar Gandhi Salai Nungambakkam, Chennai-600034.2.The Commissioner of Income Tax (Appeals)15 Ayyakar Bhavan 121, Uttamar Gandhi Road Nungambakkam, Chennai-600034.3.The Chief Commissioner of Income Tax(Appeals) Aayakar Bhavan 121, Uttamar Gandhi Salai Nungambakkam, Chennai-600034.4.Principal Commissioner of Income Tax (Appeals) Aayakar Bhavan 121, Uttamar Gandhi Salai Nungambakkam, Chennai-600 034.+1cc to Mr.J.Balachander, Advocate Sr.35169+1cc to Mr.A.P.Srinivas, Advocate Sr.35464 W.P. No.7475 of 2019 mp[co]srg 22/07/2019 https://hcservices.ecourts.gov.in/hcservices/